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12 October, 01:00

Molen Inc. has an outstanding issue of common stock with an annual dividend of $8.50 per share. The stock's annual dividend is expected to remain $8.50 in the future (i. e., g=0). If the required return on this stock is 6.0%, at what price should the stock sell today?

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  1. 12 October, 01:29
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    price stock sell today is $141.67

    Explanation:

    given data

    annual dividend = $8.50

    stock = 6.0% = 0.06

    to find out

    what price stock sell today

    solution

    we know that here annual dividend and stock rate

    so will find stock sell today by given formula that is

    stock sell today = annual dividend / stock ... 1

    put here all these value

    stock sell today = annual dividend / stock

    stock sell today = 8.50 / 0.06

    stock sell today = 141.67

    so price stock sell today is $141.67
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